Patrick et al v. Costco Wholesale Corporation et al

Filing 25

ORDER that Plaintiffs' motion to remand (Doc. 13 ) is granted and motion for sanctions (Doc. 11 ) is denied. The Clerk shall remand this case to Maricopa County Superior Court. Signed by Judge David G Campbell on 2/25/2013. (Attachments: # 1 Remand Letter)(KMG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Wade Patrick, a married man, et al.,

No. CV12-2633 PHX DGC

Plaintiffs,

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ORDER

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v.

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Costco Wholesale Corporation, a
Washington corporation doing business in
Arizona, et al.,

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Defendants.

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The parties have filed several motions.

Because the Court concludes that

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Plaintiffs’ motion to remand is well-taken, the Court will not address Defendants’ motion

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to dismiss. The Court will also deny Plaintiffs’ motion for sanctions.

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Under 28 U.S.C. § 1441, any civil action brought in state court over which the

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federal district courts have original jurisdiction may be removed to the federal district

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court for the district where the action is pending. 28 U.S.C. § 1441(a). There is a “strong

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presumption” against removal and “[f]ederal jurisdiction must be rejected if there is any

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doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564,

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566 (9th Cir. 1992). “The ‘strong presumption’ against removal jurisdiction means that

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the defendant always has the burden of establishing that removal is proper.” Id. “If at

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any time before final judgment it appears that the district court lacks subject matter

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jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).

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Removal in this case was based on diversity jurisdiction and an amount in dispute

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of more than $75,000. Where, as here, “the complaint does not demand a dollar amount,

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the removing defendant bears the burden of proving by a preponderance of the evidence

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that the amount in controversy exceeds [$75,000].” Singer v. State Farm Mut. Auto. Ins.

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Co., 116 F.3d 373, 376 (9th Cir. 1997). To meet its burden, the defendant “must provide

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evidence establishing that it is ‘more likely than not’ that the amount in controversy

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exceeds [$75,000].” Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.

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1996).

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Defendants argue that Plaintiffs certified in state court that this case was not

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subject to mandatory arbitration because the damages, including punitive damages,

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exceeded $50,000. Plaintiffs’ certification, however, says only that the damages sought

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will exceed $50,000; it says nothing determinative about the likelihood that damages will

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exceed $75,000.

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Defendants argue that other food poisoning cases have resulted in settlements or

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verdicts in excess of $75,000, citing cases from Florida, Mississippi, and Texas. The fact

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that three cases resulted in recoveries of greater than $75,000 for food poisoning,

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however, does not establish by a preponderance of the evidence that the claim in this case

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will exceed $75,000. In addition, some of the cases cited by Defendants included e-coli

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poisoning, but Defendants themselves argue in their motion to dismiss that such

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poisoning did not occur in this case.

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Defendants assert that Plaintiffs seek to recover attorneys’ fees. Attorneys’ fees

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may be included in the amount in controversy, however, only if they were incurred prior

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to the date of removal; future attorneys’ fees are too speculative to be included. Dukes v.

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Twin City Fire Ins. Co., CV-09-2197-PHX-NVW, 2010 WL 94109 at *2 (D. Ariz. Jan. 6,

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2010). Defendants fail to identify attorneys’ fees incurred before removal. Moreover,

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Defendants argue in their motion to dismiss that attorneys’ fees are not available under

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A.R.S. § 12-341.01 in this tort case.

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Finally, Defendants claim the jurisdictional minimum is satisfied by Plaintiffs’

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assertion of a claim for punitive damages. The Court concludes, however, that the
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prospect of punitive damages fails to satisfy Defendants’ burden of establishing this

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Court’s jurisdiction by a preponderance of the evidence.

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damages that may be awarded in this case is entirely speculative. See Haisch v. Allstate

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Ins. Co., 942 F. Supp. 1245, 1249 (D. Ariz. 1996) (“It would be inherently speculative for

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this Court to conclude that the amount in controversy requirement can be met by simply

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asserting that large punitive damages have been awarded in the past against insurance

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companies . . . . Defendant has failed to articulate why the particular facts that are

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alleged in the instant action might warrant extraordinary punitive damages”). Moreover,

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Defendants correctly note in their motion to dismiss that Plaintiffs have failed to plead

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the “evil mind” required for punitive damages under Arizona law. See Volz v. Coleman

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Co., 748 P.2d 1191, 1194 (Ariz. 1987).

The amount of punitive

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As noted above, this Court should remand a matter to state court if there is any

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doubt about the Court’s jurisdiction. The Court finds substantial doubt that the amount in

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controversy in this case will exceed $75,000, and therefore will remand the case to state

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court. See Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1118 (9th Cir. 2004) (“If the

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district court determines that it is sufficiently doubtful that the amount-in-controversy

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requirement has been met and thus that federal subject matter jurisdiction is lacking, the

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district court should . . . remand to state court”).

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Plaintiffs have filed a motion for sanctions which argues that Defendants’ removal

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of this action violated Rule 11(b) because it was undertaken for an improper purpose.

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Doc. 11. The Court is not persuaded. Although Defendants have failed to satisfy the

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burden necessary to maintain jurisdiction in this Court, Defendants had a colorable basis

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for asserting that removal was proper. The motion for sanctions will be denied.

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IT IS ORDERED that Plaintiffs’ motion to remand (Doc. 13) is granted and

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motion for sanctions (Doc. 11) is denied. The Clerk shall remand this case to Maricopa

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County Superior Court.

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Dated this 25th day of February, 2013.

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